Construction at BYD’s new EV plant in Brazil was suddenly halted Monday after authorities found Chinese workers in “slavery-like” conditions. The workers were hired in China by another firm, and BYD has since cut ties. BYD and the firm are now saying the term “slavery” was unjustly used, and some translations may have been misunderstood.

Why construction at BYD’s EV plant in Brazil is halted

Updated 12/26/24: This article has been updated with the latest information, including a statement from Jinjiang Group and comments from BYD’s general manager of public relations, Li Yunfei. Read more below.

According to a statement from the Public Ministry of Labor (MPT), 163 workers at the construction site of BYD’s new EV plant in Salvador, Brazil, were “being held in conditions analogous to slavery.”

Construction on the site was halted on Monday after the findings. According to the authorities, Jinjiang Group, one of the contractors BYD hired to build the new EV plant, hired the workers in China.

BYD released a statement saying it has cut ties with Jinjiang and is assisting the victims as it works with Brazilian authorities. All workers will be transferred to hotels. They will not be able to work and will have their contracts terminated.

Alexandre Baldy, senior vice president of BYD Brazil, said the company remains “committed to full compliance with Brazilian legislation, especially with regard to the protection of workers’ rights and human dignity.”

The MPT statement detailed the extreme “slavery-like” worker conditions. For example, they had one bathroom for every 31 workers, forcing them to wake up at 4 am to get in line to be ready for work at 5:30 am. They slept without mattresses on the bed, and the kitchens operated in “alarming conditions.”

If a worker quit after six months, they would leave the country without any pay after factoring in the cost of a round-trip airplane ticket.

BYD said it has held a “detailed review” over the past few weeks. The Chinese EV giant asked Jinjiang several times to improve the conditions.

A joint virtual hearing of the MPT and MTE is scheduled for December 26. The MPT said the need for new “on-site inspections” has not been ruled out. BYD’s new EV plant is set to begin production next year. Check back soon for more updates on the situation.

Update 12/26/24: Jinjian Group said the portrayal of its employees working in “slavery-like” conditions was inconsistent, and some of the translations may have been misunderstood.

“Being unjustly labeled as ‘enslaved’ has made our employees feel that their dignity has been insulted and their human rights violated, seriously hurting the dignity of the Chinese people,” Jinjiang said in a social media post (via Reuters). The company issued a joint letter to issue an apology.

BYD’s general manager of public relations, Li Yunfei, reposted the statement. Li added that “foreign forces” and some other members of the media were “deliberately smearing Chinese brands.

Mao Ning, a spokesperson for China’s foreign ministry, said the Chinese embassy in Brazil was in talks with leaders in the region to verify the accusations.

BYD is already a top-selling EV brand in Brazil. In October, it launched its first pickup, the Shark PHEV. The pickup is BYD’s sixth vehicle in Brazil, joining other popular models like the Dolphin Mini (Seagull), Yuan Plus, and Dolphin.

Once up and running, which was expected later this year or early 2025, BYD’s Brazil plant will have an annual production capacity of 150,000 vehicles.

Source: Bloomberg, Brazil Public Ministry of Labor

Tesla is rumored to have signed a battery cell supply agreement with EVE Energy, a Chinese battery cell manufacturer.

For years, Tesla has been increasing the percentage of its electric vehicles powered by LFP battery cells.

Lithium iron phosphate (LFP) is cheaper than the nickel-rich alternative, but they have lower energy density – resulting in a shorter range.

Over the last few years, LFP energy density has increased enough to make sense in cheaper electric vehicles.

Tesla has been buying LFP battery cells from China’s CATL and BYD.

In 2021, there were rumors that Tesla was in discussions with EVE Energy, another Chinese battery cell manufacturer, to source LFP battery cells.

Now, three years later, it sounds like a deal has been made.

Chinese media are reporting that Eve and Tesla have signed an agreement for Tesla to get cells from a Malaysian factory starting in 2026 (via CNEV Post):

Eve Energy has reached a supply agreement with Tesla for energy storage batteries, and its Malaysian factory is expected to start supplying energy storage batteries to Tesla US in 2026, according to a report in Chinese media outlet LatePost today.

Eve confirmed that it recently signed a deal with “a customer in the Americas” without confirming the customer, but LatePost reached out to them when reporting that Tesla was the customer, and they didn’t confirm nor deny it.

For the longest time, Tesla only had Panasonic as its battery cell supplier. The automaker pioneered using cylindrical li-ion cells in electric vehicles. Prior to Tesla, they were primarily used in personal electronics, like laptops.

At the time, Panasonic was the only cell manufacturer willing to put its cells in Tesla vehicles.

Over the last few years, Tesla has greatly increased its battery cell suppliers, adding contracts with CATL, LG, BYD, Samsung, and now apparently Eve Energy.

Hertz is trying to sell its Tesla cars to renters as it desperately tries to unload its electric vehicle inventory after a massive drop in value.

In 2021, Hertz made a major move to electrify its fleet, ordering 100,000 Tesla Model 3s and later adding Model Ys. This Tesla fleet boosted Hertz’s customer satisfaction, but issues soon arose when Tesla cut prices on the Model 3 and Model Y in 2022 and 2023, sharply reducing resale values.

This hit Hertz hard, as it relies on fleet value for its financial health. While the Model 3 held up to 90% of its value within three years as of 2020, more recent declines saw nearly 50% of that value erased, with Model Y values dropping even more.

To mitigate losses, Hertz announced plans to sell about 20,000 Teslas early this year and ramped that up recently.

You can get some exceptionally cheap Tesla vehicles on Hertz’s website. Of course, they have high mileages over short periods of time and they have been farted in by god knows how many people, but for as low as $17,000 and still under powertrain warranty, it’s not necessarily a bad deal.

But it looks like Hertz is having some issues selling those used Tesla vehicles.

The car rental company has started a new program to reach out to people who are renting its Tesla vehicles to try to get them to keep them.

A recent Hertz renter shared on Reddit an offer that the rental company sent him about keeping his Tesla Model 3 after his rental.

Hertz offered him to buy the 2023 Model 3 with 30,000 miles for just short of $18,000:

More people have received similar offers as per social media posts. It looks like a new program from Hertz to try to unload their Tesla inventory.

Electrek’s Take

These are not necessarily bad deals, but you shouldn’t expect “like new” cars. People tend not to take good care of rental cars.

But it might be a good solution for used car buyers looking to go electric.

At the cost and with fuel savings, this is basically a $12,000 vehicle over a few years.

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